Timor-Leste is a lower-middle income economy, a UN-designated Least Developed Country, and the smallest economy in Southeast Asia. Its 2023 GDP of $2.1 billion accounts for 0.1% of the regional GDP of Southeast Asia. With a population of 1.4 million, Timor-Leste’s GDP per capita is $1,503, the second-lowest in the region.
From 2015 to 2023, 6,250 aid and development projects were implemented in Timor-Leste by 53 development partners, totalling $2.8 billion in official development finance (ODF).
Key trends
ODF disbursements including grants, loans, and other forms of assistance to Timor-Leste have remained remarkably steady over time, averaging just over $300 million annually.
In absolute terms, Timor-Leste receives the least ODF in developing Southeast Asia. However, Timor-Leste receives the highest amount of ODF relative to the size of its economy, with ODF equivalent to 14% of GDP in 2023. Reflecting its low income level, 87% of ODF received by Timor-Leste is in the form of grants.
Looking ahead, new commitments to Timor-Leste have halved over the last two years since a peak in 2021, now below the annual average for 2015–23. This trend could indicate a forthcoming decline in disbursement levels.
- Spent
- Committed
Development partners
Australia was responsible for more than one-quarter of ODF to Timor-Leste from 2015–23, and at times has accounted for one-third of incoming ODF (in 2021 and 2023).
Australia’s support is directed primarily, and increasingly, to the government and civil society sector, largely for human development, sub-national governance, and fiscal budget support programs. Australia provides its ODF to Timor-Leste entirely through grants.
Japan, the United States, and the Asian Development Bank (ADB) made up Timor-Leste’s second tier of partners, each contributing around 10% of total incoming ODF over 2015–23. While Japan’s support has remained relatively steady and the United States’ has grown, the ADB is playing a diminishing role in Timor-Leste, its support having halved in real terms since 2015.
Japan and the ADB share a focus on infrastructure, with both spending the most in the transport and storage sector, while the United States targets its support to human development, focusing on government and civil society, education, humanitarian aid, and health. The United States delivers its ODF exclusively through grants, while the ADB deploys a mixture of financing mechanisms including grants, concessional loans, and non-concessional loans. In 2023, for the first time ever, Japan did not provide concessional loans to Timor-Leste, using only grants.
Former colonial power Portugal’s ODF to Timor-Leste has remained consistent, in particular funding education programs through grants.
Sectors
Timor-Leste receives the most ODF in the government and civil society sector, accounting for 25% over 2015–23, mostly for public sector institution capacity-building and employment policy development.
The second-largest ODF sector in Timor-Leste is transport and storage, dominated by construction of roads and water transport infrastructure such as ports. In recent years, the focus on transport and storage has declined; where it was in some years (2016, 2018, and 2019) the largest sector, in 2023 it was ranked fifth by spending.
The education and health sectors have received steady levels of assistance, including a substantial bump in 2021 in response to the pandemic. Early childhood education and the provision of meals and snacks at school account for the majority of spending under education, while basic nutrition is the biggest sub-sector by spending under health, reflecting high levels of stunting and malnutrition in the country. Combined, those two sectors constitute 26% of Timor-Leste’s annual average ODF.
- Timor-Leste
- Regional average
Policy goals
The Southeast Asia Aid Map tracks ODF with integrated policy goals across three policy domains or cross-cutting themes (as distinct from sectors): climate action, gender equality, and disability inclusion.
Timor-Leste has received rising levels of policy-integrated ODF, and in fact receives more than the regional average for all three policy domains as a share of ODF. Over 2015–23, 13% of Timor-Leste’s ODF was marked for disability inclusion, 44% for gender equality, and 38% for climate action.
Provision of intra-regional ODF
Timor-Leste is a small and irregular provider of assistance to its neighbours, in part because it is not yet a formal member of the Association of Southeast Asian Nations. It has provided modest amounts of humanitarian aid to Thailand, Malaysia, Indonesia, Laos, and Myanmar, but has not disbursed any intra-regional ODF since 2019.